Officials from the Federal Reserve, Federal Deposit Insurance Corporation, DLLR and DBED to discuss challenges and opportunities for lending to small businesses in Maryland
BALTIMORE, MD (July 22, 2010) - Governor Martin O’Malley today convened a roundtable discussion of banking executives, officials from the Federal Reserve, the Federal Deposit Insurance Corporation, the Department of Labor, Licensing and Regulation, and the Department of Business and Economic Development to discuss challenges and opportunities for lending to small businesses in Maryland.
“Small and family owned businesses are the backbone of our economy. They create nearly two out of every three jobs in Maryland. And they are still feeling the pain of the national recession. Too many have been forced to shut their doors during this recession, and too many continue to struggle just to make payroll,” said Governor O’Malley. “I’ve asked you to join us today because I want to talk to you about additional steps we can take, so that we can get the capital flowing to our small business that will allow them not only to keep the doors open, but to grow and to thrive, and to create and save more Maryland jobs.”
Making sure that credit is available and flowing to small businesses is vital to recovery and job growth. The Federal Reserve has recently held a series of events bringing together stakeholders to assist in forming a national policy response. This event is intended to focus that discussion at the state level and identify any additional steps that might be taken to make credit more available to sound small businesses, beyond those already undertaken by the O’Malley-Brown Administration.
In 2009, for example, the Governor launched Maryland’s Small Business Credit Recovery Program, which works through an existing state financing program – the Maryland Industrial Development Financing Authority (MIDFA) – to provide a state-funded guaranty of privately-financed small business loans. Part of the initiative includes a Certified Lender’s program, which provides immediate approval of up to a $50,000 guaranty, and a Rapid Response program, which provides 48-hour approval of up to a $250,000 guaranty.
Governor O’Malley and the Maryland Department of Business and Economic Development were instrumental in drafting the State Small Business Credit Initiative Act of 2010, which has been passed by the U.S. House of Representatives and is awaiting action in the Senate. The federal proposal is based largely on Maryland’s Small Business Credit Recovery Program and would help to capitalize funding for the 34 states and U.S. territories that have existing loan guarantee programs.
“We need small businesses to create jobs to continue the momentum of the economic recovery, and the growth of those businesses depends critically on access to credit. We need to find ways to ensure that creditworthy businesses are able to get the loans they need, and a collaborative process is vital to coming up with creative solutions,” said Alexander M. Sanchez, Secretary of Labor, Licensing and Regulation, whose department includes the Office of the Commissioner of Financial Regulation.